Earnings position

HHLA’s performance data made encouraging progress in 2019. At 7,577 thousand TEU, there was a moderate year-on-year rise in container throughput of 3.3 % (previous year: 7,336 thousand TEU). At the three Hamburg terminals, the slight increase was due to higher overseas traffic volumes. Prior-year figures of the international terminals are only comparable to a limited extent, as the container terminal in Tallinn was only incorporated into the consolidated group at the end of the second quarter of 2018. At 1,565 thousand TEU, transport volumes even exceeded the high prior-year level with strong growth of 5.7 % (previous year: 1,480 thousand TEU). Both rail and road transport contributed to this growth.

Revenue

in € million

Against this background, HHLA Group revenue rose by 7.1 % to € 1,382.6 million (previous year: € 1,291.1 million) in the reporting period. In addition to volume growth, this increase resulted in particular from price adjustments, the restructuring of container transports and a higher proportion of hinterland volumes in container throughput. The listed Port Logistics subgroup largely developed in line with the HHLA Group as a whole. Its Container, Intermodal and Logistics segments recorded an overall increase in revenue of 7.3 % to € 1,350.0 million (previous year: € 1,258.5 million). The non-listed Real Estate subgroup achieved slight revenue growth of 2.5 % to € 40.2 million (previous year: € 39.3 million). The Real Estate subgroup thus accounted for 2.4 % of Group revenue.

At € 0.1 million, changes in inventories once again had no material impact in the reporting period (previous year: € 0.4 million). Own work capitalised increased to € 6.2 million (previous year: € 5.2 million).

Other operating income rose by 10.1 % to € 45.6 million (previous year: € 41.4 million).

Operating expenses

Expense structure 2019

In line with revenue, operating expenses increased significantly by 7.0 % to € 1,213.3 million (previous year: € 1,134.0 million). The prior-year figures do not include expenses for TK Estonia in the first half of the year.

Compared to the previous year, the cost of materials increased significantly by 9.3 % to € 401.2 million (previous year: € 367.1 million). The rise in the cost of materials ratio to 29.0 % (previous year: 28.4 %) was influenced by the changing structure of container transports in the material-intensive Intermodal segment.

Personnel expenses rose by 7.4 % to € 516.1 million (previous year: € 480.6 million). In addition to higher union wage rates, other factors included volume growth in container throughput and transport, as well as the conversion of the company pension scheme. The personnel expense ratio remained virtually unchanged at 37.3 % (previous year: 37.2 %).

Other operating expenses decreased markedly by 21.8 % to € 134.6 million (previous year: € 172.1 million) during the reporting period. The ratio of expenses to revenue decreased to 9.7 % (previous year: 13.3 %). The first-time application of IFRS 16 decreased other operating expenses by € 55.4 million. This was offset above all by a marked increase in consulting expenses.

Against the background of these developments, the operating result before depreciation and amortisation (EBITDA) rose by 20.2 % to € 382.6 million (previous year: € 318.5 million) and thus much more strongly than revenue. There was a correspondingly strong increase in the EBITDA margin to 27.7 % (previous year: 24.7 %).

Depreciation and amortisation increased significantly by 41.3 % year-on-year and amounted to € 161.4 million (previous year: € 114.2 million). The first-time application of IFRS 16 accounted for € 41.1 million.

Operating result (EBIT)

in € million, EBIT margin in %

The operating result (EBIT) was increased significantly by 8.3 % to € 221.2 million in the reporting period (previous year: € 204.2 million). The first-time application of IFRS 16 had a positive effect on EBIT amounting to € 14.4 million. The EBIT margin increased slightly to 16.0 % (previous year: 15.8 %). In the Port Logistics subgroup, EBIT rose by 8.5 % to € 204.4 million (previous year: € 188.4 million). As a result, the subgroup accounted for 92.4 % (previous year: 92.3 %) of the Group’s operating result in the reporting period. In the Real Estate subgroup, EBIT climbed 6.5 % to € 16.5 million (previous year: € 15.5 million). and accounted for 7.6 % of the Group’s operating result (previous year: 7.7 %).

Net expenses from the financial result increased by € 14.5 million, or 70.2 %, to € 35.1 million (previous year: € 20.6 million). The rise was largely due to the changes in lease accounting from the initial application of IFRS 16, which resulted in increased expenses of € 15.8 million. There was an opposing effect from lower expenses for the revaluation of an equalisation liability payable to a minority shareholder in conjunction with a profit and loss transfer agreement of a subsidiary.

At 26.4 %, the Group’s effective tax rate was higher than in the previous year (previous year: 24.6 %).

Profit after tax and minority interests decreased by 8.0 % year-on-year to € 103.3 million (previous year: € 112.3 million). Non-controlling interests accounted for € 33.8 million in the 2019 financial year (previous year: € 26.2 million). From a financial point of view, this item includes the expenses mentioned in relation to the financial result associated with revaluing the settlement obligation to a minority shareholder. Earnings per share decreased by 8.0 % to € 1.42 (previous year: € 1.54). The listed Port Logistics subgroup posted an 9.0 % decline in earnings per share to € 1.34 (previous year: € 1.47). Earnings per share of the non-listed Real Estate subgroup were up on the prior-year figure at € 3.57 (previous year: € 3.46). As in the previous year, there was no difference between basic and diluted earnings per share in 2019. The return on capital employed (ROCE) was down 4.0 percentage points year-on-year at 10.8 % (previous year: 14.8 %). Corporate and value management

As in the previous year, HHLA’s appropriation of profits is oriented towards the development of the HHLA Group’s earnings in the financial year ended. The distributable profit and HHLA’s stable financial position form the foundation of the company’s consistent profit distribution policy. On this basis, the Executive Board and Supervisory Board will propose at the Annual General Meeting on 10 June 2020 a dividend of € 0.70 per class A share and € 2.10 per class S share. Based on the number of shares with dividend entitlement as of 31 December 2019, the sum to be distributed for listed class A shares would decrease by 12.5 % to € 49.0 million (previous year: € 56.0 million). As in the previous year, the sum to be distributed for non-listed class S shares would amount to € 5.7 million. In relation to the consolidated profit and earnings per share, the dividend payout ratio would be approximately 52 % for the Port Logistics subgroup (previous year: 54 %) and around 59 % for the Real Estate subgroup (previous year: 61 %).